Investor · Reading, PA · Member since 2013 · 122 posts · 33 votes
Example listing.
http://reading.craigslist.org/reo/4075606608.html
Question is what is the motivation for dictating a title company?
I assume if you said no, I want mine they could simply turn down your offer, however, is that normally in a purchase agreement?
Please share any guesses you have as to why I see this more than on occasion. My only guess is they have some financial benefit, or just a comfort level with a specific title company.
I almost always let the buyer select their own title company, bank, home inspector, etc. There could be some circumstance as above that title should be one place over another.
Just like Chris, the op, buyers can be suspicious about requirements to go a specific place for some real estate service. By allowing the buyer to independently select their service provided all suspicions are removed. It allows the buyer to feel that I have nothing to hide, which I don't.
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
12y
Hi Chris,
There can be several reasons.
1. In PA, the overwhelming majority of title companies won't settle a house/property that has been through tax sales unless there is either a Quit Title Action Suit or a Quit Claim Deed from the former owner. If this is a tax sale property the seller may have found a title company that will settle a tax sale property without either QTA or QCD.
2. There can be some other title issue that this title company has reviewed and accepted. I once had a title issue, only 3 of 4 heirs signed a deed over 100 years ago. My title company was ok with that due to the age, but the buyer's title company from the largest real estate company in the area would not accept that situation and I had to do a second Quiet Title Action Suit to settle the property. (Chapter 111)
3. The letter's title company may have a Letter saying a specific lien is not a problem. This happened for one property that I had where a mortgage from 3 owners ago was not marked as satisfied at the courthouse. The seller that I bought it from had a letter from that bank, which I think is the largest regional bank headquartered in PA. that that mortgage was satisfied and not a problem. (Chapter 51)
I would ask the seller, if I was interested in the property his reason for the title company selection. And I would say that since he selected the title company that he should also PAY for the title search and title insurance also.
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
12y
@Chris Haas as @David Krulac mentioned, there are legitimate reasons why a specific title company can requested, on both sides. Having developed office parks that were PUD's with individual lots, residential subdivisions, etc., I can tell you that doing multiple lots allowed us to get a discount.
We're also done deals where we had a seller request a title company, and we needed to use ours, therefore; we split it. One handled our side of the deal, and theirs the other part. Which title company to use shouldn't be a deal breaker. Just talk to the agent, find out the reasoning, and work with them and your title company to find a solution.
Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
12y
most large reo companies have contracts with title companies. They get a discount for sending all their work to them. They still allow buyer to use their own title company, but the buyer has to pay for title insurance and closing fees.
In Pennsylvania, residential title insurance rates are regulated by the State Department of Insurance and the rates are set by law. There are some discount for recent re-sales, but those rates are also regulated by law. The rates are the exact rates that can be charged and you can not charge either more or less than the state rates without breaking the law, so discounts are illegal.
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
12y
I'm sure California rates are regulated also. However; in our case because we turned the properties within the specified time frames, it allowed a discount. Either way, there are ways to work with the selling side of the equation to work out something that benefits both sides. Unless there's some reason not to use the sellers title company, it's just as easy to do so.
since the title insurance fee is set by the government, many title companies don't charge for settlement as they make money of title insurance premiums.
Title insurance is only insurance where you insure past events and except out any questionable event.
in Colorado we have title insurance Fee and then a separate closing fee. Closing fees range from $150 up to $800 in some cases. I did notice the company charging $800 went out of business. What is the set fees for title insurance? Here is about $800 to $1000 for a $150k house
Residential Real Estate Agent · Mc Keesport, PA · Member since 2012 · 449 posts · 154 votes
12y
I dictate the closing company all the time. Why? Because I have a property under contract, have opened escrow on it and I'm going to assign the contract to another investor/buyer.
It has nothing to do with a financial perk. It does have a little to do with comfort level. When you're wholesaling a deal you want to work with a title company that you know is familiar with the assignment of contracts.
In short, lots of wholesalers put this disclaimer, "must use seller's title company" in their advertisements.
I almost always let the buyer select their own title company, bank, home inspector, etc. There could be some circumstance as above that title should be one place over another.
Just like Chris, the op, buyers can be suspicious about requirements to go a specific place for some real estate service. By allowing the buyer to independently select their service provided all suspicions are removed. It allows the buyer to feel that I have nothing to hide, which I don't.
Residential Real Estate Agent · Mc Keesport, PA · Member since 2012 · 449 posts · 154 votes
12y
Yes, if you buy a property for $1,000 the title insurance cost will be $500. $0 - $30,000 sales price is $500. What most people don't know is that if you buy for $1,000 and provide an itemized list of repairs to be done that will increase the property's value to $30,000 you can actually get insurance for the full $30,000 and not just the $1,000 that you're paying for the property. Since you're already paying the $500, why not do this and max out the coverage that you're already paying for? There's a tip for you : )
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
It's all negotiable who pays for what. However, there is law in place about choice of title company. The Buyer's Choice Act in 2010 in CA and RESPA provisions (federal) make it illegal to force the buyer to use the seller's choice of escrow and title. The seller can choose as long the buyer signs a disclosure that informs the buyer of their right to choose.
I'm sure California rates are regulated also. However; in our case because we turned the properties within the specified time frames, it allowed a discount. Either way, there are ways to work with the selling side of the equation to work out something that benefits both sides. Unless there's some reason not to use the sellers title company, it's just as easy to do so.
I don't think you received a discount on title policies for volume . You may have purchased binders when you bought. If you pay a 10% binder fee when you buy, then your title premium is based on the difference between your buy and sell price. That's the only title discount I know of.
Investor · Reading, PA · Member since 2013 · 122 posts · 33 votes
12y
@Dan N. actually I have no interest in Reading but I am checking craigslist since there is no craiglist for shillington, or smaller suburb townships. I guess I could change my city to shillington, pa but I figure noone will know where that is.
The title company question while I found it in reading is more of a general question which I appreciate everyone answering.